Semirara Mining and Power Corporation's Net Income Dropped 28% to P6.5 Billion in Q12024

Semirara Mining and Power Corporation (SMPC), an integrated energy company, saw a 28% decline in net income in the first quarter of 2024 to P6.5 billion from P9.0 billion in the same period last year as the impact of increased energy sales volume and increased coal exports was lessened by lower market pricing.

Because of sluggish demand from industrialized nations brought on by changes in energy policy, a move toward renewable energy sources, and a slowdown in economic activity, global coal indices fell.

The Indonesian Coal Index 4 (ICI4) declined at a slower rate (25%) from an average of US$76.5 to US$57.2, while the Newcastle index fell by 49% from an average of US$247.8 to US$126.0.

Due to lower fuel prices and higher supply, average spot rates in the Luzon-Visayas power market decreased by 27%, from P6.28 to P4.61.

“While we faced some pricing challenges this quarter, our robust export sales and improved plant performance demonstrate the resilience and adaptability of our operations,” said SMPC president and COO Maria Cristina C. Gotianun.

Better Operating Results

​The amount of coal sold increased from 3.5 million metric tons (MMT) to 4.8 MMT, a 37% increase, mostly due to a 78% increase in exports from 1.5 MMT to 2.7 MMT.

Due to the highest level of plant availability ever recorded by the company—92%—internal sales saw a 6% increase in domestic shipments, which increased from 2.0 MMT to 2.1 MMT.

Gross generation increased by 7% from 1,316 gigawatt hours (GWh) to 1,408 GWh as a result of improved overall plant availability.
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Consequently, the volume of electricity sold rose from 1,241 GWh to 1,281 GWh, a 3% increase. Higher bilateral contract quantity (BCQ) sales were the main driver of this growth, offsetting the period's drop in spot market dispatch.
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Spot sales fell by 11% from 880 GWh to 782 GWh; however, BCQ sales increased by 38% from 361 GWh to 499 GWh.

Lower Selling Prices

The average selling price (ASP) of Semirara coal decreased by 33% from P4,427 per metric ton (MT) to P2,978/MT between January and March.

The company's electricity ASP decreased by 28% in the same time period, from P6.17/KWh to P4.47/KWh, mostly as a result of the steep decline in wholesale electricity spot prices.

While BCQ prices fell by 5% from P4.90/KWh to P4.66/KWh, spot prices fell by 35% from P6.69/KWh to P4.35/KWh.